Why is Obama’s top man defending the Fed?
It is not surprising that Wall Street and the banking community would make such a fuss over the possible passage of HR1207, the bill that would require the Federal Reserve Bank to sweat through a public audit of its finances. But what is surprising is that the White House is on the side of the bankers.
Long before the financial crisis of 2007 crashed across the planet, a soft-spoken Congressman from Texas was leading a one-man campaign that would force the Federal Reserve Bank to crack open its dusty books for an annual public inspection.
Ron Paul, 74, regularly met with howls of protest when he tried to warn about the Bank’s secretive ways. But his dogged determination has (almost) paid off, as dozens of his colleagues are jumping on the audit bandwagon, and his efforts to regulate the Federal Reserve Bank are just a few votes from being realized.
But first, what is the Federal Reserve Bank? Well, considering the strange way it came into existence many decades ago (during a secret meeting on Jekyll Island off the coast of Georgia, attended by a handful of America’s richest individuals), some would argue it is the single most-powerful syndicate ever imagined.
Following on the heels of the meeting at Jekyll Island in 1913, when most of the Senate was out of town on Christmas holiday, the Federal Reserve Act was voted into force. Yet despite the official-sounding “federal” in its name, the Bank has no connection with the US government. It is for all intents and purposes just another corporation, albeit one with the power to a) control the money supply; b) control interest rates; and c) lend money to the US government – at interest, which is paid by, yes, the US taxpayer.
“The law says that the GAO (Government Accountability Office) has the right to audit the Federal Reserve,” Paul warned the Conservative Political Action Conference. “But we are prohibited from getting any answers from the Fed, yet they have more money and more control over out lives and our dollars and your future. They have control over the foreign policy and the domestic policy and you don’t have any right to know anything about it, because I can’t even get the information.”
Paul called the ability of the Federal Reserve to print money and play with interest rates at will “a monstrous fraud.” (To watch video of Ron Paul addressing CPAC, click here).
But these financial fears are not new, and have been expressed by some of the most powerful men in America’s history.
“The real truth of the matter is that a financial element… has owned the government since the days of Andrew Jackson,” admitted Franklin D. Roosevelt in 1933, when the effects of the Depression were at its worst. Unfortunately, only in days of despair and desperation does truth reveal its ugly head.
For Thomas Jefferson, the entire notion of an outside power controlling the money supply was equivalent to slavery.
“If the American people ever allow private banks to control the issue of currency… the banks and corporations that grow up around them will deprive the people of their property until their children wake up homeless on the continent their fathers conquered.”
But there is no need to quote America’s top historical leaders about the importance of the government controlling the money supply: the US Constitution already does that.
So what’s up with Rahm?
Back to the main question of this article: Why is Rahm Emanuel, the White House Chief of Staff, so determined to defend the non-transparent practices of an institution that is potentially threatening to the interests of the American people?
Maybe Fed Chairman Ben Bernanke convinced Rahm to back off because, as he warned during a congressional oversight committee last year, “GAO reviews may be initiated at the request of members of Congress. Reviews or the threat of reviews in these areas could be seen as efforts to try to influence monetary policy decisions," Bernanke said.
Or perhaps Rahm is heeding the dubious advice of Alan Greenspan, the former master of the till, who attempted to explain the bank’s secretive ways as some sort of necessity.
"We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand," Greenspan said, according to the transcripts of a meeting in March 2004. "I'm a little concerned about other people getting into the debate when they know far less than we do."
Senator Bernie Sanders (I-Vt.), the lead sponsor of the bill, said that Greenspan's comments only support the need for an audit, while making reference to the past sub-prime mortgage crisis that helped to bring down the global house of cards.
"I think it just adds a lot of weight to what we are trying to do," Sanders said. "It just points to the fact that if there was more transparency, then it, in fact, would have allowed the debate to take place about the sub-prime mortgage…It may have prevented the horrendous recession that we're in now and the near collapse of the financial institutions."
Last year, Sanders brought the amendment to the Senate floor and won 59 votes. The Senate requires 60 votes for a bill to make it to the president’s desk, but since then there has been some change of heart amongst the opposition. Eight senators who voted against the measure to audit the Federal Reserve are now co-sponsors of it. Yet still, Sanders acknowledged a tough battle ahead, specifically mentioning the White House.
"I think momentum is with us. But I've gotta tell you that, on this amendment, you're taking on all of Wall Street, you're taking on the Fed, obviously, and unfortunately you seem to be taking on the White House, as well. And that's a tough group to beat," said Sanders.
Meanwhile, he's been trading calls with Rahm Emanuel, the White House chief of staff.
Very soon, the entire world will get to see exactly how serious President Obama is about “hope” and “change,” because without the ability to peek into the books of the Federal Reserve – which lent over $2 trillion to Central Bank subsidiaries around the globe without any congressional oversight at the height of the latest financial crisis – the American people will remain enslaved, as Abraham Lincoln once feared, to the money interests.